Multiple acquisitions and healthier international markets helped Henry Schein post a record second quarter, according to an earnings report released Wednesday.
Although the strength of the U.S. dollar against various foreign currencies once again shortchanged overall sales, the Melville-based provider of medical, dental and animal-health products and services recorded its second consecutive quarterly sales record.
For the quarter ended June 27, Henry Schein reported $2.6 billion in net sales – a 0.5 percent increase over net sales recorded in 2Q 2014 and a $100 million jump over its record-setting $2.5 billion 1Q 2015.
Net income for 2Q 2015 was reported as $123.2 million ($1.46 per diluted share), or $117.9 million ($1.40 per diluted share) factoring in $7.2 million in pretax restructuring costs. The $123.2 million represents a 6 percent increase over net income reported in 2Q 2014.
Chief Executive Officer and Chairman of the Board Stanley Bergman called the company’s second-quarter fiscal performance “solid.”
“Overall, the global markets we serve were healthy during the quarter, and we believe we continued to gain market share,” Bergman said in a written statement.
Bergman added that Henry Schein was affirming its guidance range for 2015 adjusted, diluted earnings per share and said the company’s “restructuring activities will continue to favorably impact our ongoing results.”
Recent “restructuring activities” include the acquisition of a majority share of Kruuse A/S, Scandinavia’s largest veterinary products distributor (the deal is expected to close in the third quarter); a 50 percent ownership stake in Romanian animal-health distributor Maravet, announced in April; a January majority stake in German veterinary firm Scil Animal Care Co.; and the May 2014 acquisition of U.S. equine-supplement manufacturer SmartPak.
These acquisitions helped Henry Schein’s Animal Health group post $748.6 million in 2Q sales. That’s a 0.8 percent decline from Animal Health group sales recorded in 2Q 2014, though the group reported a 0.6 percent increase in internally generated sales, including 4.8 percent growth in international internally generated sales.
“Growth in our Animal Health group was aided by strategic acquisitions in North America and internationally,” Bergman said in the statement, noting Kruuse A/S and Maravet are both leading veterinary distributors in their regional markets.
Results were mixed across Henry Schein’s other groups. Dental sales were reported at $1.3 billion, down 3.5 percent from 2Q 2014, but sales in the Technology and Value-Added Services group increased 0.4 percent year-over-year to $89.5 million and Medical group sales were noticeably strong, jumping 16.7 percent over 2Q 2014 to $470.5 million.
Bergman said the Technology and Value-Added increase was an especially good sign.
“The advanced-technology products and services we offer support our commitment to the efficient delivery of healthcare services,” the CEO said in the statement. “[They] provide a platform for sales opportunities across all of our businesses.”
The company also announced that it repurchased about 267,000 shares of common stock during the second quarter at an average price of $140.58 per share – a roughly $37.5 million repurchase that had an “immaterial” effect on 2Q diluted earnings per share. The company has authorized approximately $187 million for future common stock repurchases.
The strong second quarter topped an impressive first half of 2015, with Henry Schein reporting $5.1 billion in sales, a 0.9 percent increase over the first half of 2014. Net first-half income was $231.6 million ($2.74 per diluted share), or $221.4 million ($2.62 EPS) counting $14.1 million in pretax restructuring costs. The $231.6 million is a 6.1 percent increase over net income reported in the first half of 2014.
The numbers, of course, only tell part of the story of Henry Schein’s stellar first half. In addition to its rapid-fire acquisitions, the Fortune 500 and NASDAQ 100 company was added in March to the prestigious S&P 500 stock index – which lists the largest companies trading on the NASDAQ and the New York Stock Exchange – with a Long Island-best market capitalization of about $11.5 billion.
Then, in April, the company landed on Forbes’ first-ever list of America’s Best Employers, which polled more than 20,000 employees at U.S. companies, nonprofits and government agencies to determine the nation’s top 500 worker-friendly organizations. Only two Long Island companies – Henry Schein (No. 203) and Melville-based Canon USA (No. 464) – made the list.